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HIGH COURT RULING

Manila Water warns of rise in rates, worse traffic

/ 05:34 AM October 10, 2019

MANILA, Philippine — Water rates would rise and traffic congestion would further worsen in Metro Manila if a Supreme Court order compelling Manila Water Co. Inc. to pay P921.5 million for violating the Clean Water Act is enforced, the company said on Wednesday.

Manila Water spokesperson Jeric Sevilla said implementation of the high court’s decision would raise the sewerage charge, translating to P26.70 per cubic meter.

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“Worse traffic is also to be expected since hundreds of kilometers of roads, including Edsa, which are part of the Manila Water’s East Zone [concession area], would have to be dug up all at the same time,” Manila Water said in a statement.

“The daily loss of P3.5 billion caused by existing traffic congestion could balloon significantly,” added the publicly listed company, the water concessionaire for eastern Metro Manila and parts of Rizal province.

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Business establishments

Based on Manila Water’s concession agreement with the regulator, the Metropolitan Waterworks and Sewerage System (MWSS), only business establishments should shoulder the sewerage charge—pegged at 30 percent of the basic charge.

For the current rate-setting period, Manila Water’s business customers pay P505.66 for the first 10 cubic meters and between P55.05 and P66.78 for the succeeding cubic meters depending on the volume consumed.

In a decision promulgated on Aug. 6, the Supreme Court affirmed a decision of the Court of Appeals that found Manila Water and the MWSS guilty of violating Section 8 of the Clean Water Act. The law mandates that these entities connect all existing sewage lines to the available sewerage system within five years from its effectivity, which started on May 6, 2004.

A similar decision applied to Maynilad Water Services Inc., the concessionaire in the west zone of Metro Manila, which also serves parts of Cavite province.

Manila Water, which last week filed a motion for reconsideration in the Supreme Court, said it had complied with its sewerage responsibilities under the Clean Water Act and that it should not be fined.

Interconnection

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In a statement, the Ayala group subsidiary said the law “simply required MWSS, Manila Water and Maynilad to interconnect the ‘existing’ water lines of households, condominiums and subdivisions, among others, to the ‘available’ sewer lines of the concessionaires.”

Manila Water said it had interconnected 61,000 out of 63,000 customers to its sewer network by 2009, or within the five-year period since the law took effect.

It added that the remaining 2,000 customers could not be connected to its sewerage network because the available sewers “would be compromised if overloaded.”

“But since then, [we have] installed additional sewers and spent billions of pesos more than [we have] collected for the purpose, Manila Water said.

40-year project

“Sec. 8 [of the law] did not envision the completion of the whole project, only the interconnection.”

The company added that if it were to do within five years what was planned as a 40-year project, the hundreds of billions of pesos that would have been spent would lead to an increase in the water bill of customers.

Last month, Manila Water said it intended to spend P115 billion more over the next 17 years to complete its sewerage program by 2037 when the concession agreement with the MWSS expires.

Manila Water chief operating officer Abelardo P. Basilio said that since 1997, when the company took over the east zone, it had spent a total of P38.5 billion on wastewater programs from collection of fees of only P36.9 billion.

Basilio said this meant that Manila Water laid out “excess investments” of P1.6 billion, something that the company expected to continue.

Refund, fine

Besides the penalty slapped by the Supreme Court for violating the Clean Water Act, Manila Water was fined by the MWSS.

It shelled out P353 million to compensate customers who suffered many hours and even days with low pressure or no water at all in March, through a one-time voluntary bill waiver program that was implemented in April.

On top of that and for the same reason—which is  failure to deliver on the concessionary requirement of providing customers continuous water supply for more than 15 days—the MWSS penalized Manila Water a total of P1.13 billion.

Similarly, the MWSS meted out to Maynilad a fine of P2,500 per affected connection or household for its failure in May to supply water in portions of Barangay Captain Albert Aguilar in Las Piñas City.

Fewer than 2,000 connections were affected.

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TAGS: Clean Water Act, Manila Water Co. Inc., Metro Manila traffic, Supreme Court, water rates
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